Unearned Premium Reserve - Property, General Casualty and Surety Insurance.

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Section 27-36-3

Unearned premium reserve - Property, general casualty and surety insurance.

(a) As to insurance against loss or damage to property, except as provided in Section 27-36-4, and as to all general casualty insurance and surety insurance, every insurer shall maintain an unearned premium reserve on all policies in force.

(b) The commissioner may require that such reserves shall be equal to the unearned portions of the gross premiums in force after deducting applicable reinsurance in solvent insurers as computed on each respective risk from the policy's date of issue. If the commissioner does not so require, the portions of the gross premium in force, less applicable reinsurance in solvent insurers, to be held as an unearned premium reserve, shall be computed according to the following table:

Term for Which Policy Was Written Reserved for Unearned Premium
1 year or less 1/2
2 years 1st year3/4
2nd year1/4
3 years 1st year5/6
2nd year1/2
3rd year1/6
4 years 1st year7/8
2nd year5/8
3rd year3/8
4th year1/8
5 years 1st year9/10
2nd year7/10
3rd year1/2
4th year3/10
5th year1/10
Over 5 years pro rata

(c) In lieu of computation according to the table in subsection (b) of this section, the insurer, at its option, may compute all of such reserves on a monthly or more frequent pro rata basis.

(d) After adopting a method for computing such reserve, an insurer shall not change methods without approval of the insurance supervisory official of its state of domicile.

(e) This section does not apply to title insurance.

(Acts 1971, No. 407, p. 707, §739.)


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